intimated entered the minds of those who formed the organization.

It is stated that the step taken by the Republican students is soon to be followed by the Democratic students and it is not unlikely that the other political parties will in time emulate their examples. In several states, notably Michigan and Indiana, the college students have organized, or are organizing political leagues which will co-operate with the national associations in their work.

All these facts are significant. They contain quite a little food for reflection. They suggest that the college student is not exerting all his energy in high-pole vaulting, tennis, and football,-and, by the way, the vote of a college man in this free country of ours counts for just as much as that of a Harrison, a Cleveland, or any other American citizen.

JEAN LA RUE BURNETT.

SOME FALLACIES OF THE PEOPLE'S PARTY.

THE

BY EDWIN MEAD.

HERE is no question of the need of a reform movement in American politics. There can be no question that it should be a "People's" movement, to the end that our government shall come to be somewhat nearer to the ideal expressed by Lincoln-"a government of the people, for the people, and by the people." The murmur of discontent among the producers of wealth constantly increases in volume and is a danger signal that the foolish may scorn but which the thoughtful must heed. Not that we are to deceive ourselves in thinking to legislate out of existence "all the ills to which humanity is heir." Perfected societies are not made, but grow; are not called into being by royal decrees or legislative enactments, but are the result of gradual development.

A reform movement to be effectual must be founded on the basic laws of morality and political economy. We need, above all things, to study the first principles of justice, equity, and of economics; for there is no question that the violations of such laws are the cause of present wrongs in the body politic. In the individual, physical pain surely indicates a sin-a transgression of the unchangeable laws of health, and social distress in a nation just as surely indicates a sin, a political or economic sin-a transgression of the laws of economics or ethics. Without doubt our great political sin has been, and is, the granting of special privileges; legislating for private interests regardless of its effect on the people in general.

In national, state, or municipal legislation the same great wrong is committed. In national legislation it is in the form of outrageous tariffs, bounties, and land grants enacted at the demand of private interests without consideration as to the public

welfare. State legislation in the shape of laws of inspection grant special privileges to certain trades, professions, or classes while seeming to protect the public; such as the laws of meat inspection, examinations of drug clerks, etc. By our legislative bodies in cities we grant valuable franchises to individuals or corporations, thus making a community pay tribute to a privileged few. When we shall elect aldermen to pass ordinances for the benefit of a city, assemblymen to legislate in the interests of a state, and congressmen who will enact laws for the good of the nation instead of passing acts to further private interests, the great reformation of the age will have been accomplished.

But how does the People's party propose to bring about this much needed reform? They denounce protective tariff laws as class legislation and demand other class legislation, such as the Subtreasury scheme. They complain of the government's loaning to bankers at one per cent, but demand the same thing for the farmers! We are suffering because of the sin of granting special privileges. Shall we find relief by granting more privileges? Shall we be so inconsistent as to denounce special legislation for the benefit of bankers and manufacturers and at the same time demand such legislation for the farmers? Is it in accordance with the dictates of common sense to attempt to reform a drunkard by giving him more alcohol? Shall a nation,-intoxicated by extravagant paternal legislation,-be made sober by more legislation of the same sort? Will justice be attained by practicing more injustice?

The People's party demand the repeal of the privilege granted the national banks of issuing currency. If we are to accept some of the startling declarations of Mr. C. C. Post in the February Arena, the national banks surely must have a bonanza as banks of issue. Mr. Post makes the astonishing statement that national banks make a profit of 700 per cent on their investment when they borrow money at one per cent and loan it out at eight per cent. The remarkable calculation by which the difference between one and eight becomes 700 is certainly amazing. Evidently Mr. Post has mistaken the interest for the principal when he speaks of an "investment of one cent real

The investment

izing a profit of seven cents or 700 per cent." must be the amount paid for the bonds; it surely cannot be the interest paid by the banks upon the amount of paper they are allowed to issue. The greatest advantage of obtaining a loan from the government on the bonds purchased is the low rate of interest (one per cent), and what is made by so doing is the difference between one per cent and the rate charged by private

concerns.

The actual interest profit to a bank by virtue of being a national bank can be easily calculated. Suppose two banks start in business each with a capital of $100,000. One a private bank and the other a national bank. The private bank loans out its capital in full (this is a supposed case) at eight per cent, which would be an interest profit of $8,000. The national bank buys United States bonds with its $100,000, and at the present price of four per cent would have some $85,000 worth of the bonds. As their currency issue can be only ninety per cent of the face of the bonds, they will have about $77,000 to loan. At eight per cent this would be $6,160 plus four per cent interest on bonds, $3,420, making $9,580, less one per cent of issue for cost of same gives a total interest of $8,810, which is a gain of only $810, or about one per cent in annual interest profit by being a national bank. This is somewhat different from Mr. Post's figuring, but we may leave it to the men engaged in banking to say which is more nearly correct.

Now this is not an argument in support of the present policy of allowing national banks to be banks of issue. But whatever wrong there is in such policy is not to be made right by such baseless exaggeration as contained in Mr. Post's article. Such a mistake is especially to be regretted as that gentleman's many writings are abundant evidence of his deep sympathy with the cause of the people.

Another demand of the People's party, expressed in many state as well as in national conventions, is "that the amount of money in circulation be speedily increased to $50 per capita." By what means has it been discovered that $50 per capita is the proper amount of money for the business of the country?

What data have they used in their calculation to show that twice the amount of the present circulation is desirable or likely to improve the financial condition of the country? Is there any one who can tell how much money the country requires; any one who has any data whatever, for solving such a problem? In fact, is it necessary that the problem should be solved? Ninety per cent of business is transacted without the use of money. The banks of the country settle balances through clearing houses of a hundred million every day without handling a dollar in money. All this is made possible by credit, and credit is made possible by confidence. It has been truly said, "The affairs of life hinge upon confidence," and especially is this true in the world of business. Because the credit system has proved disastrous in retail trade and is being replaced by the cash system, it is not proved thereby that the credit system is altogether wrong. It simply proves that it is not adapted to the retail trade where so many customers are unknown or irresponsible parties; but the immense volume of larger transactions would be utterly impossible without some such system. May it not be more confidence that is needed in the industrial world of to-day rather than more money?

But it is urged, "we need a large increase in the amount of money that money may be cheap." Is cheapness the first quality of money to be considered? Do we not want above all things GOOD money? Should we not judge money by the test of "how good," rather than how expensive or how cheap?

The two chief functions of money are to serve as a medium of exchange and to express value. The money that has the greatest confidence of the people will circulate most freely and will therefore best perform the first function. Money that is most stable in value will best perform the latter function. These are questions of the greatest importance and the question of cheapness must, of necessity, be an after consideration.

But would a large increase in the amount of money give us cheap money; that is, money that could be had at a low rate of interest? No doubt it would give us one sort of cheap money, namely cheap in purchasing power, but does the amount of